LATEST UPDATES
Card-image-cap

Market | Bonds & Fixed Income

NT-Bills Update: Bearish Sentiment Persists as Average Yield Expands 32bps WoW to 10.99%

Dec 05, 2022   •   by Afrinvest Research   •   Source: Afrinvest   •   eye-icon 147 views

The Nigerian Treasury Bills (“NT-Bills”) secondary market closed the previous week on a bearish note despite improved system liquidity (which stood at N268.0bn long as of Friday). Consequently, average yield increased by 32bps to close at 10.99% from 10.67% recorded in the past week.


Across the benchmark, average yield expanded at the short (+2bps) and mid- end (+33bps) of the curve, as sells-offs were witnessed across all maturities. However, average yield contracted at the long end (-6bps), as the 9-Nov-23 and 23-Nov-23 maturities were introduced to the market.


On Wednesday, 7-Dec-22, the Apex bank is scheduled to roll over bills worth ₦54.36bn across the 91-, 182- and 364-Day instruments in the Primary Market Auction (PMA).
 
Please see below our PMA expectations:

Auction Date

7-Dec-22

7-Dec-22

7-Dec-22

Allotment Date

8-Dec-22

8-Dec-22

8-Dec-22

Tenor

91-Day

182-Day

364-Day

Offer Amount (₦'bn)

 1,028,893

 1,935,259

 51,392,617

Last Stop Rate (%)

6.50

8.05

14.84

Expected Stop Rate Range (%)

6.55 – 7.00

7.50 – 8.55

13.50 - 15.50

 
Going into the week, we expect the market to resume on a quiet note, as investors remain on the side lines ahead of the PMA on Wednesday. Thus, we advise investors to continue to position in relatively attractive bills across the yield curve, while also staying alert for possible corporate offerings.
 
Please see indicative secondary market NT-Bills rates below
 

Maturity

Tenor (Days)

Net Rate (%) p.a.

Yield (%) p.a.

26-Jan-23

52

6.65

 6.71

9-Feb-23

66

7.15

7.24

9-Mar-23

94

7.55

7.70

13-Apr-23

129

8.90

9.19

11-May-23

157

8.80

9.15

10-Aug-23

248

9.50

10.16

23-Nov-23

353

11.50

12.94

Rates are valid till 01:45 pm today (05-Dec-22)
*Please note that the minimum subscription for NT-Bills is 100, 000.00
  

FGN Bond Update: Average Yield declined by 10bps W-o-W to 14.28%
The bearish sentiment in domestic bond secondary market halts, as the bulls dominated the market. Thus, average yield contracted by 10bps W-o-W to 14.28% from 14.38% in the past week.

 
A further breakdown shows that buy interest were witnessed at short and long end of the curve, as average yields dipped by 30bps and 3bps respectively. This is evident in the MAR-2027 and the MAR-2036 maturities as yields declined by 55bps and 26bps W-o-W respectively. On the other hand, average yield at the mid end of the curve closed flat at an average of 14.47% evident in the APR-2029 and MAY-2029 maturities as yield remained unchanged at 14.45% respectively.
 
This week, we expect to see continued buy interest, as investors continue to demand for maturities with attractive yield. We therefore advice investors to take advantage of maturities with relatively attractive offers in the secondary market particularly at the short and long end of the curve.
 
Please see below FGN bond secondary market rates:

 

Maturity

Tenor (Years)

Yield (%)

Coupon (%)

Implied Price (N)

Mar-24

1.2

           13.60

             14.20

                   100.62

Mar-25

2.2

           13.65

             13.53

                   99.72

Jan-26

3.1

           13.68

             12.50

                     97.04

Mar-27

4.2

           13.50

             16.29

                   108.79

Feb-28

5.2

           13.75

             13.98

                   100.78

Jul-34

11.6

           13.95

             12.15

                     89.75

Mar-36

13.2

           14.10

             12.40

                     89.86

Apr-37

14.3

           15.26

             16.25

                   106.01

Jan-42

19.1

           14.00

             13.00

                   105.51

Rates are valid till 01:45pm today (05-Dec-22)
*Please note that the minimum subscription for FGN Bond is N20,000,000

Related items.

Get the App

apple-store  play-store

Connect with us


Proshare is a professional practice focused on delivering research and information services to bridge the gap between investors and markets; by delivery on credible, reliable, and timely engagements through the following areas — Impact Research, Market Intelligence, Strategic Advisory, Stakeholder Relations & Digital Media.